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THIRD DIVISION

G.R. No. 154377 : December 8, 2003

LAND CAR, INC.,, Petitioner, v. BACHELOR EXPRESS, INC. AND VALLACAR TRANSIT, INC., respondents.

D E C I S I O N

VITUG, J.:

On 21 May 1999, petitioner filed with the Regional Office of the Land Transportation Franchising and Regulatory Board (LTFRB), Region XII, a verified application to operate a public utility bus service from Davao City to Cagayan de Oro City via Butuan City.

Respondents, themselves grantees of certificates of public convenience, opposed petitioners application alleging that the route applied for was sufficiently being served by them, and that cutthroat competition would only result if petitioners application were to be favorably acted upon.

On 29 October 1999, the LTFRB rendered its decision granting petitioners application and directing the issuance of the corresponding Certificate of Public Convenience. Respondents motion for reconsideration was denied in the boards resolution of 27 January 2000. Respondents then appealed to the Office of the Secretary of the Department of Transportation and Communication (DOTC). On 05 June 2000, the DOTC Secretary reversed the decision of the LTFRB. This time, it was petitioners turn to move for reconsideration of the DOTC Secretarys resolution. The motion, however, was denied by the DOTC Secretary in his order of 30 August 2000. Respondents thereupon moved for the immediate implementation by the LTFRB of the decision of the DOTC Secretary. On 03 October 2000, the LTFRB granted respondents motion and directed petitioner to cease and desist from operating its buses along the contested route.

On 07 October 2000, petitioner filed a letter-appeal to the Office of the President seeking to set aside the resolution and order, dated 05 June 2000 and 30 August 2000, respectively, of the DOTC Secretary. Petitioner then likewise filed before the Court of Appeals a petition for certiorari, docketed C.A.-G.R. SP No. 61159, questioning the same resolution and order of the DOTC Secretary subject of the letter-appeal addressed to the Office of the President. Upon advice of its new counsel, however, petitioner filed a notice of withdrawal of its petition for certiorari (C.A.-G.R. SP No. 61159) pending with the appellate court. The appellate court did not act upon the notice of withdrawal of the petition (C.A. G.R. SP No. 61159) but, instead, dismissed, in its resolution of 09 November 2000, the petition for failure of compliance with Section 1, Rule 42, of the 1997 Rules of Civil Procedure on non-forum shopping.

On 20 October 2000, the Office of the President issued a memorandum directing that the execution of the resolution and order of the DOTC Secretary, dated 05 June 2000 and 30 August 2000, respectively, be meanwhile stayed.

On 15 January 2001, respondents filed with the Court of Appeals a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, docketed C.A.-G.R. SP No. 62619, assailing the Memorandum Order of the Office of the President. Respondents argued that the Office of the President had no jurisdiction to issue the assailed order in the absence of any law providing for an appeal from the DOTC to the Office of the President, adding that petitioner was guilty of forum shopping in addressing a letter-appeal to the Office of the President.

On 18 June 2001, the Court of Appeals granted respondents petition for certiorari basically on the ground that petitioner was guilty of forum shopping. It ordered the dismissal of the appeal filed by petitioner before the Office of the President and reinstated the resolution and order of the DOTC Secretary enjoining petitioner from operating its buses along the contested route.

In the instant appeal, petitioner contends that the appellate court has decided a question in a way not in accord with applicable jurisprudence. There is merit in the petition.

Forum shopping refers to the act of availing oneself of several judicial remedies in different courts, either simultaneously or successively, substantially founded on the same transaction and identical material facts and circumstances, raising basically like issues either pending in, or already resolved by, some other court.¹ The principle applies not only with respect to suits filed before courts but also in connection with a litigation commenced in court while an administrative proceeding is pending in order to defeat administrative processes in anticipation of an unfavorable administrative ruling and possibly a favorable court ruling.² Forum shopping is said to exist where the elements of litis pendentia are present or where a final judgment in one case would amount to res judicata in the other;³ or where, in the two or more cases pending, there is identity of (a) parties, (b) rights or causes of action, and (c) reliefs sought.⁴cräläwvirtualibräry

In order to deter the evils of forum shopping, Circular 28-91, dated 08 February 1994, issued by the Supreme Court requires that every petition filed with the Supreme Court or the Court of Appeals must be accompanied by a certification of non-forum shopping. Administrative Circular 04-94, made effective on 01 April 1994, expands the certification requirement to include cases filed in court and quasi-judicial agencies below the Supreme Court and the Court of Appeals. Ultimately, the Court adopted paragraphs (1) and (2) of Administrative Circular No. 04-94 to become Section 5, Rule 7, of the 1997 Rules of Civil Procedure. Significantly, to curb the malpractice of forum shopping, the rule ordains that a violation thereof would constitute contempt of court and be a cause for the summary dismissal of both petitions without prejudice to the taking of appropriate action against the counsel of the party concerned.⁵cräläwvirtualibräry

Undeniably, there is identity of cause of action and reliefs sought between the petitioners letter-appeal filed with the Office of the President and the petition for certiorari filed with the Court of Appeals (C.A. G.R. SP No. 61159). The DOTC resolution and order, dated 05 June 2000 and 30 August 2000, respectively, were sought to be set aside in both appeals filed by petitioner.

The doctrine of exhaustion of administrative remedies empowers the Office of the President to review any determination or disposition of a department head. The doctrine allows, indeed requires, an administrative decision to first be appealed to the administrative superiors up to the highest level before it may be elevated to a court of justice for review. Thus, if a remedy within the administrative machinery can still be had by giving the administrative officer concerned every opportunity to decide on the matter that comes within his jurisdiction, then such remedy should be priorly exhausted before the courts judicial power is invoked.⁶cräläwvirtualibräry

The appellate court correctly ruled that the action of a department head bears only the implied approval of the President, and the latter is not precluded from exercising the power to review the decision of the former pursuant to the Presidents power of control over all executive departments, bureaus and offices.⁷ The Office of the President validly acquired jurisdiction over the case upon the filing therewith of the appeal by herein petitioner, and said jurisdiction is not lost by the subsequent recourse by the petitioner of the certiorari proceedings before the Court of Appeals. Jurisdiction which has attached in the first instance continues until the final resolution of the case. Incongruently, the appellate court, while recognizing to be valid the exercise of jurisdiction by the Office of the President, ordered the dismissal of the appeal pending with the said office based on forum shopping.

The decision of the appellate court ordering the dismissal of the appeal taken to the Office of the President is clearly flawed. It is the latter, not the appellate court, which could dismiss the case pending before that office. It also behooves courts of justice, if only for reasons of comity and convenience, to shy away from a dispute until the system of administrative redress is completed so as to give the administrative office every opportunity to correct its error and to properly dispose of the case. In fact, the appellate courts order to dismiss the appeal pending with the Office of the President could well constitute an undue intrusion into a valid exercise of jurisdiction by the President over acts of subordinates within that office.

WHEREFORE, the petition is GRANTED, and the assailed decision is SET ASIDE. No costs.

SO ORDERED.

Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

¹ Gatmaytan vs. Court of Appeals, 267 SCRA 487.

² First Philippine International Bank vs. Court of Appeals, 252 SCRA 259.

³ Buan vs. Lopez, Jr., 145 SCRA 34.

⁴ Employees Compensation Commission vs. Court of Appeals, 257 SCRA 717.

⁵ Administrative Circular No. 04-94, April 1, 1994; Fil-Estate Golf and Development, Inc. vs. Court of Appeals, 265 SCRA 614; Prubankers Association vs. Prudential Bank & Trust Company, 302 SCRA 74.

⁶ Paat vs. Court of Appeals, 266 SCRA 167.

⁷ Section 17, Article VI, 1987 Constitution.